TVL: Ethereum’s Layer-2 Reaches New All-Time High
The Total Value Locked (TVL) of Ethereum has reached an all-time high of $21.16 billion, marking a significant increase of 333% since the beginning of January 2023. Despite this increase, Ethereum prices remain stable at $2,245, which is a 54% decrease compared to the peak in November 2021. The TVL of Ethereum’s layer-2 ecosystem has exceeded the amount locked in all decentralized finance protocols (DeFi) in January 2021.
In the last month alone, the TVL of Ethereum’s layer-2 has increased by 34%, reaching a current level of $20.8 billion. Over the past year, it has experienced a growth rate of 333%. In comparison, DeFi markets have seen a 38% increase in TVL during the same period.
An analyst has interpreted this scenario as a rotation from layer-1 ecosystems to layer-2 solutions on Ethereum. Despite the focus on layer-2 solutions, ETH prices have remained in the background. However, it is predicted that once ETH prices increase, investors will return to Ethereum and layer-2 solutions.
Arbitrum One Leading the Layer-2 Market
Arbitrum One is currently the market leader in Layer-2 solutions with approximately $10 billion of TVL and almost 50% market share. Optimism (OP Mainnet) ranks second with $5.8 billion in TVL and a market share of 28.7%. Other layer-2 platforms such as Metis Andromeda and Base have smaller TVLs.
Pectra and Upcoming Evolutions of the Ethereum Network
During the first All Core Devs Execution (ACDE) meeting of 2024, Ethereum developers discussed the implementation of Verkle Trees in empowering decentralization through Pectra. Test network distributions of Dencun were scheduled, with the initial launch on Goerli set for January 17th. The next ACDE call is scheduled for January 18th to allow flexibility in planning adjustments if needed.
Ethereum clients for Goerli will be released in the next week, followed by Sepolia and Holesky. Dencun aims to reduce transaction fees for Layer 2 rollups by implementing EIP-4844, which will have a positive impact on data availability and shape the future of the Ethereum network.
Hot Take: Ethereum’s Layer-2 TVL Reaches All-Time High
The Total Value Locked (TVL) of Ethereum’s layer-2 ecosystem has reached an impressive all-time high of $21.16 billion. This represents a significant increase of 333% compared to the beginning of January 2023. Despite this achievement, Ethereum prices have remained stable, but it is predicted that once ETH prices increase, investors will return to Ethereum and layer-2 solutions.
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